ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy

Brightwater University must satisfy students, government funders and employers, whose expectations sometimes conflict, for example funders prioritise low cost while students want small classes. Which is the most appropriate way for management to deal with such conflicts in setting performance objectives?

Management should prioritise objectives using stakeholder power, legitimacy and urgency and explicitly negotiate trade-offs. Because expectations genuinely conflict, they cannot all be fully met, so a reasoned balance is needed rather than ignoring weaker groups or adopting only the funder's view.

1. AIgnore the lowest-power group's expectations entirely
2. BPrioritise objectives according to stakeholder power, legitimacy and urgency, and explicitly negotiate trade-offsCorrect
3. CAdopt only the funder's objectives since they supply the money
4. DSet identical objectives for every stakeholder to avoid conflict